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respect to the Partnership transactions, the records indicate
that Becker overlooked several red flags regarding the economic
viability and market for the Sentinel EPE recyclers. The
offering memoranda for the Partnership transactions warned that
there was no established market for the Sentinel EPE recyclers.
Becker never saw any marketing plans for selling the pellets or
leasing the recyclers. He accepted representations by PI
personnel that they would be marketing the recyclers to clients
and that there was a sufficient base of end-users for the
machines, yet he never saw PI's client list. At the time of the
closing of the Partnerships, Becker did not know who the end-
users were or whether there were any end-users actually committed
to the transaction.
Becker purportedly checked the price of the pellets by
reading trade journals of the plastics industry. However, he did
not use those same journals to investigate the recyclers'
purported value or to see whether there were any advertisements
for comparable machines. The record in these cases does not
indicate that any of petitioners or their advisers other than
Becker asked to see those journals for their own examination. In
concluding that the Partnerships would be economically
profitable, Becker made two assumptions that he concedes were
unsupported by any hard data: (1) That there was a market for
the pellets; and (2) that market demand for them would increase.
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